43
University of Michigan UP 505 Winter 2011 Prepared By GeoSmart Consulng NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF ANN ARBOR A Plan for the Huron Highlands Neighborhood Geothermal System

NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

  • Upload
    others

  • View
    1

  • Download
    0

Embed Size (px)

Citation preview

Page 1: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

University of MichiganUP 505 Winter 2011 Prepared By GeoSmart Consulting

NEIGHBORHOOD GEOTHERMALFOR THE CITY OF ANN ARBOR

A Plan for the Huron Highlands Neighborhood Geothermal System

Page 2: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

GeoSmart Consulting would like to acknowledge...

Andrew BrixCity of Ann Arbor, University of MichiganKathleen PepinProfessor, University of Michigan - Dearborn & Neighborhood ContactMegan Masson-MinockLecturer, University of MichiganGavin ShatkinProfessor, University of MichiganJulie SteiffWriting Instructor, University of Michigan

...for their valuable contributions.

GeoSmart Consulting is a team of students from the University

of Michigan Taubman College Program of Urban and Regional Planning:

Alex DeCamp

Shintaro Hori

Kimberly Jongsma

Qian Zhang

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

ACKNOWLEDGEMENTS

Page 3: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

Contents

1: Executive Summary

Investigation.........................................................4

Findings.................................................................5

Recommendations................................................6

2: Introduction

Problem Statement .............................................7

Ann Arbor..............................................................8

The Huron Highland Neighborhood.....................9

3: Visions, Goals and Objectives.......................13

4: Background

What is Geothermal?.........................................14

How it Works......................................................15

Definitions..........................................................16

Why Geothermal?..............................................17

5: Lessons Learned - Case Studies....................18

6: Implementation Tools

Neighborhood Improvement Authority.............20

Property Assessment Clean Energy....................21

Homeowners’ Associations &

Special Assessment Districts..............................22

Financing............................................................23

Local Geothermal Companies ...........................24

7: Geothermal for Ann Arbor

Barriers...............................................................26

Recommended Solutions ..................................27

Community Involvement....................................28

8: Geothermal for Huron Highlands

Barriers...............................................................29

Recommended Solutions...................................30

Cost Analysis Worksheet....................................31

Community Involvement....................................32

9: Appendices

A: Survey.............................................................34

B: Cost Analysis Worksheet................................36

C: Full Case Studies.............................................37

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

CONTENTS

Page 4: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

The City of Ann Arbor is progressive and innovative when it comes to environmental sustainability. Installing LED lights downtown and implementing an award-winning recycling program, Ann Arbor has shown dedication to finding new ways of taking care of the earth.

These achievements could not have happened without the citizens’ support, ideas, and participation. In late 2010, the residents of Huron Highlands neighborhood showed profound interest in a natural gas-eliminating system called geothermal heating and cooling. As natural gas is non-renewable and its prices are unpredictable residents may benefit from switching to this more efficient system. But where does one start when wanting to make the transition from a traditional furnace to a geothermal system? How does one afford it? These are the questions this project embarked to answer.

InvestigationThe investigation to answer these questions involved a door-to-door survey, research into the infrastructure of the neighborhood, research into financial options, case studies, and consultation with geothermal experts and city officials.

Huron Highlands is a neighborhood in northern Ann Arbor off Pontiac Trail with just under 100 single-family

residential units. The door-to-door survey found that the average heating bill is around $150 dollars a month and average house size was around 1200 square feet. Twenty-four persons expressed interest in installing geothermal to their homes, if it were affordable. The average amount the residents were willing to invest up-front was $3000. Eleven of the respondents had furnaces older than 11 years, so they would have the opportunity to install geothermal instead of replacing their furnace.

The next steps were to find out what type of geothermal system is feasible for this neighborhood, how much the materials and installation cost, and what financial aid is available to alleviate the cost.

4 1: EXECUTIVE SUMMARY

Figure 1: Vertical Loop System

1: Executive Summary

Page 5: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

In Michigan, the most common type of geothermal heating and cooling is a heat exchange system that utilizes the constant temperature of the earth below the frost line. This system transfers the constant temperature to the internal heat exchange unit and reduces the amount of energy nec-essary to maintain desired temperatures. This efficiency also saves money. Resi-dents who switch to geothermal usually see energy costs reduced by half. Those who have switched also say that the heat is better quality than conventional systems.

On the neighborhood scale, the homes can all connect to a large loop system or have individual, unconnected systems in their own yards. Large loop systems are more suitable for new developments of dense residential communities, since they can be installed without disturbing any established streets, sidewalks, and underground infrastructure. Additionally, the developer can bundle the cost into the selling price of the new units. Individual systems are more suitable for existing

neighborhoods because their installation does not necessarily require disturbing streets or infrastructure: the owner can install the system on their property without crossing into the right-of-way. This installation as a result can be much less expensive, however, requires the owner to incur the fees of the system.

The underground pipes of individual geo-thermal systems are positioned either verti-cally or horizontally. Vertical systems have bores (wells) that range from 150’ to 450’ deep. These systems typically require 100 square feet of surface area. Horizontal sys-tems require trenches dug 6’ deep and ex-tend horizontally, requiring at least 300’ of open surface area. The costs increase with depth of drilling, so vertical systems can be more expensive to install, but they may be necessary if property space is limited.

51: EXECUTIVE SUMMARY

Figure 2: Huron Highlands Neighborhood

Figure 3: Huron Highland Park

Findings1: Executive Summary

Page 6: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

System TypeDue to the existing roads, sidewalks, and underground utilities of Huron Highlands, it may be inefficient to install a large loop system. This would require not only crossing parcel lines but also crossing into the right of way, which involves permits and ownership issues. For Huron Highlands, individual systems are more cost-effective and less complicated legally. Also, if the residents can get multiple systems drilled at the same time, they can get discounted drilling costs. We recommend vertical individual loop systems rather than horizontal, due to the smaller parcel size in the Huron Highlands neighborhood. However, the residents should consult with the geothermal providers on their specific site.

Implementation PlanKnowing what system is most cost-effective leads to the process of implementing and funding the system.

The internal heat exchange unit can cost the homeowner between $6,000 and $12,000. Combined with drilling and installation, the total cost can be $15,000 to $30,000 or more. However, there are various grants, loans, and tax incentives that make it possible to finance a geothermal system over a period of time with fixed monthly payments.

The residents of Huron Highlands can work with the City to form a Neighborhood Improvement Authority (NIA), a group authorized by the City to be eligible for numerous funding sources, such as donations, revenue bonds, assets,

Tax Increment Financing (TIF), and federal or state grants.

An NIA can work with the City to establish a Special Assessment District (SAD) for the houses involved in the geothermal project. A Special Assessment District allows the City to gather funds for a public project in a specific area. The City would issue bonds to cover the up-front cost of the project and implement the SAD for long-term repayment. Residents can then fund the cost of the individual heat pumps by private financing through the Michigan Saves Program, Energy Star Financing, and various grants. If the option of creating an SAD is not available, residents can use Michigan Saves Program and Energy Star Financing to finance the whole project with unsecured loans.

Assuming the neighborhood forms an NIA, it will need mechanical and drilling permits to legally install the system, which the drilling company can assist in acquiring.

These recommendations imply that the residents each own and operate their geothermal system. The benefits of this include:1. NIA as a financing mechanism.2. Total neighborhood involvement is not required.3. Drilling costs decrease as resident involvement increases.4. Reduced upfront costs and fixed monthly payments.

6 1: EXECUTIVE SUMMARY

RecommendationsFor Huron Highlands

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 7: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

Recommendations for the City of Ann Arbor

The City of Ann Arbor can improve its energy efficiency by installing geothermal systems in new or redeveloped neighborhoods. It should accommodate and consider any neighborhood group, like Huron Highlands, that wishes to use geothermal for its heating and cooling. The City of Ann Arbor can encourage implementation of neighborhood geothermal systems by various means. It has the authority and financial mechanisms to introduce geothermal technology into the private and public sectors. The City can finance residential neighborhood systems by creating Neighborhood Improvement Authorities (NIA), utilizing the various financing methods NIAs allow. If NIAs are not available, such as in historic districts, then the City can create a Special Assessment District to fund the project.

The City of Ann Arbor will implement geothermal systems depending on the property and land type. In new developments, The City can encourage large loop systems due to the easy access of drilling in open space. Individual well systems are more suitable for existing construction due to the already established infrastructure, streets, and utility lines. If the City wishes to fund and manage these systems, it can create its own utility, charging a monthly fee similar to those paid to DTE or Consumer’s Energy.

71: EXECUTIVE SUMMARY

Individual Neighborhood Municipality

Mechanical and Drilling Permits Utility

Neighborhood Improvement Authority

Special Assessment District

Homeowners Association

Large Loop

Individual Bores Individual Bores

Large Loop

Individual Bores

Tax Rebates, Unsecured Loans

NIA, SAD Funds

Monthly Service Fee

Syst

em T

ype

Lega

l Req

uire

men

tsFi

nanc

ial

Great Lakes Energy

Right-of-Way Permit & Franchise (Large Loop Only)

Diagram

This diagram serves as a guide to the type of system, legal requirements, and financial aid available for an individual, neighborhood, or municipality that is interested in installing geothermal in Ann Arbor. Some of the requirements apply to more than one type of owner.

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 8: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County.1

Annually, Ann Arbor experiences an average of 131 days with temperatures below freezing.2 Ann Arbor has a tradition and reputation of embracing energy-saving and ecologically friendly systems, adopting LED streetlights and installing over 9 miles of bicycle lanes in recent years.

In light of recent changes in global climate and concern over availability and price of natural gas, communities across the world are considering alternative systems to heat and cool their homes. Geothermal is an alternative heating and cooling system and is highly regarded for its efficiency in using the constant underground temperature to regulate indoor temperature. Although some private parties have installed geothermal in Ann Arbor, the City itself does not operate its own geothermal utility.

It can be more efficient and cost-effective to install geothermal on a larger scale than for one building. Implementing geothermal systems on a neighborhood scale could give more residents access to alternative

heating and cooling systems while further reducing dependence on natural gas.

The main concern with a new system implementation is affordability. Though geothermal systems save money in the long run, the initial costs of installation can discourage adoption.

This report offers a plan featuring a feasible and cost-efficient system for Huron Highlands and a guide to acquiring financial assistance. Additionally, this report discusses necessary implementation tools the City should use when installing geothermal systems.

2: IntroductionProblem Statement

8 2: INTRODUCTION

Figure 4: Natural Gas

Figure 5: Geothermal Pipes (About 6’ deep)Figure 6: Large Loop System

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 9: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

92: INTRODUCTION

A select group of eco-conscious residents of Huron Highlands wish to implement a neighborhood scale geothermal heating and cooling system. These residents, led by Kathleen Pepin, notified the City that they were interested in working together to achieve such a project. The City is interested in working with Huron Highlands on this project and later using the process as a model for other Ann Arbor neighborhoods to follow.

Huron Highlands is a loop of single-family houses in northern Ann Arbor just west of Pontiac trail. Some of the homes are rented but most are owner-occupied. Most of the houses were built in the late 1960s with an average of 1200 square feet and roughly 7500 square feet of yard space.3 There is a public park in the middle of the loop and an easement south of Larkspur: both are city-owned properties. The easement has a foot path and many mature trees, and at one point was slated to be a road, but there are no current plans for it.

The Huron Highlands Neighborhood

Figure 7: Aerial Photo and Map Location of Huron Highlands

US Census 2000 Variables .15 Mile Radius of 452 Skydale Drive

Population 297% Female 51.50%% Male 48.60%Median Age 38.9Household Average Income $77,664Total Housing Units 106Owner Occupied Housing 88.5%Renter Occupied Housing 5.6% Vacant Housing Units 5.9%

Table 1: Census 2000 statistics of a .15 mile radius of 452 Skydale Drive, a residence near the center of Huron Highlands neighborhood.

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 10: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

10 2: INTRODUCTION

Zoning, Parcel Lines, and Building Footprints of Huron Highlands

This map marks where the parcels and buildings are while displaying zoning types in the area. It shows where there is adequate space for drilling geothermal and ensures that installation will not cross over parcel lines.

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 11: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

112: INTRODUCTION

Soil Types and Parcel Lines of Huron Highlands

Before digging bores for geothermal, the drilling company must have a soil analysis. Ann Arbor, however, has soil data available, as seen by the map on the left. The soil is mostly a mixture of sand and loam, which is easy to dig in.

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 12: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

12 2: INTRODUCTION

Sources Consulted

1. “Ann Arbor Population and Demographics (Ann Arbor, MI).” Ann Arbor Yellow Pages and Ann Arbor MI Guide. Web. 23 Apr. 2011. <http://annarbor.areaconnect.com/statistics.htm>.

2. “Ann Arbor, Michigan (MI) Profile: Population, Maps, Real Estate, Averages, Homes, Statistics, Relocation, Travel, Jobs, Hospitals, Schools, Crime, Moving, Houses, News, Sex Offenders.” Stats about All US Cities - Real Estate, Relocation Info, House Prices, Home Value Estimator, Recent Sales, Cost of Living, Crime, Race, Income, Photos, Education, Maps, Weather, Houses, Schools, Neighborhoods, and More. Web. 23 Apr. 2011. <http://www.city-data.com/city/Ann-Arbor-Michigan.html>.

3. “Ann Arbor Township MI Homes for Sale & Ann Arbor Township Real Estate - Zillow.” Zillow - Real Estate, Homes for Sale, Home Prices & Values. Web. 23 Apr. 2011. <http://www.zillow.com/homes/huron-highlands,-ann-arbor,-mi_rb/>.

Figures1. ”Geothermal Cost Benefits Pennsylvania.” Carney

Plumbing, Heating & Air Conditioning | Bucks County & Montgomery County PA. Web. 24 Apr. 2011. <http://www.carneyphc.com/geothermal/geothermal-cost-bene-fits>.

2. Taken by Shintaro Hori

3. Taken by Shintaro Hori4. Natural Gas. Photograph. Stock Photo. Stockwatch.in.

Web. 18 Apr. 2011. <http://www.stockwatch.in/files/natural-gas_0.jpg>.

5. Geothermal. Photograph. O’Leary Plumbing and Heat-ing. Web. 18 Apr. 2011. <http://www.olearyplumbin-gandheating.com/>.

6. Jeffery, Yvonne. “Regulating Your Home’s Climate with Solar Techniques - For Dummies.” How-To Help and Videos - For Dummies. Web. 24 Apr. 2011. <http://www.dummies.com/how-to/content/regulating-your-homes-climate-with-solar-technique.html>.

7. Google Maps, Inc.

Tables1. Adapted from “Demographics Now” website. 2011. Al-

teryx, LLC. Orange, CA. <www.demographicsnow.com>

Mapsp. 10 “Zoning, Parcel Lines, and Building Footprints of Hu-ron Highlands” Ann Arbor GIS data. SAND Lab. Accessed 20 April 2011

p. 11 “Soil Types and Parcel Lines of Huron Highlands” Ann Arbor GIS data. SAND Lab. Accessed 20 April 2011

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 13: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

3: Vision, Goals, and Objectives

OGVThe City of Ann Arbor will facilitate and encourage sustainability by utilizing geothermal energy to reduce fossil fuel dependence. The geothermal system demonstrated by the Huron Highland neighborhood will serve as an exemplary community model of this.

• ReducedependenceonnaturalgasasasourceforheatingenergyintheCityofAnnArbor.

• Implementgeothermalenergysystemsin5%ofresidentialneighborhoodsand10%ofpublicfacilitiesby2020.

• CreateafinanciallyviablemodelforanalternativeheatingandcoolingsysteminHuronHighlands.

• Lowerimplementationcoststounder$10,000perhousehold.

• UsethegeothermalmodelinHuronHighlandstoincentivizeinstallingsystemsthroughouttheCityofAnnArbor.

• Increasetaxrevenuebyincreasingpropertyvalues.

• Increasepublicawarenessofgeothermalbenefits.

• Educateresidentsonthegeothermalinstallationprocess.

• Connect45ofthe90HuronHighlandhouseholdstotheneighborhoodgeothermalsystemby2020.

• Increasepropertyvaluesbyinstallingofgeothermalsystems.

• Reducemonthlyenergybillsby50%

• PublishtheenergyandcostsavingsresultsofHuronHighlands.

133: VISION, GOALS, OBJECTIVES

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 14: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

Because there are many uses involved with geothermal heat, this report defines, for its purposes, geothermal energy as the heat exchange system that uses the constant temperature of the earth’s crust (5 or more feet below the surface) to efficiently heat up liquids within geothermal pipes. These underground pipes extract heat from the ground in the winter and expel heat into the ground in the summer.

The open loop system (Figure 8a) transfers heat directly from well or existing ground water. This system needs abundant sources of clean water and adequate runoff area and is not as common in colder regions. This is why we will not be discussing this form of geothermal.

The closed loop system, which is a heat exchange system, uses pipes so that the antifreeze used in geothermal never comes into contact with the ground or groundwater. Closed loop systems are more common in Michigan than open loops due to the lack of water sources or discharge wells.

Among heat exchange systems, there are two types of layouts possible for neighborhoods. The large loop consists of a central well and pump with a large underground piping grid to which each home is required to connect. Each resident needs to purchase a heat exchange unit and

connect to the larger grid. Installation can be complicated if sidewalks, streets, and underground infrastructure are already in place.Individual wells are independent geothermal systems located within each parcel. This requires each home to have its own heat exchange unit and well. Individual well systems do not require interference with streets, infrastructure, or property lines.

The underground pipes of individual geothermal systems are positioned either vertically or horizontally. Vertical systems (Figure 8b) have bores (wells) ranging from 150’ to 450’ deep. These systems typically require 100 square feet of surface area. Horizontal systems (Figure 8c) require trenches dug 6’ deep and extend horizontally, requiring at least 300’ of open surface area. The costs increase with depth of drilling, so vertical systems can be more expensive to install, but they may be necessary if property space is limited.

Depending on the heating and cooling requirements, or loads, of the home will determine the necessary footage of underground piping. Underground piping can also be implemented various ways. For example, a home can have one pipe 450’ deep, or three pipes 150’ deep. Professional consultants can determine the type that suits the property best places.

4: BackgroundWhat Is Geothermal?

14

Figure 8a

4: BACKGROUND

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 15: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

The ground loop is the system of fluid-filled plastic pipes buried underground that extracts or returns heat into the ground to warm or cool the building as needed. The heat pump removes heat from the fluid in the pipes, concentrates it, and transfers it to the building heating and cooling system (Figure 9). The air delivery system is in the form of air ducts or a radiator floor system that distributes heated or cooled air throughout the building. A heat pump operates on the same basic principles as an ordinary refrigerator, and it consists of a heat exchanger, compressor, reversing valve, air condenser and an expansion valve/metering device. In the heating cycle, anti-freeze solution from the ground loop enters the heat pump and passes through a heat exchanger where latent heat is transferred to a refrigerant, which is piped to the compressor via the reversing valve. The compressor then raises the temperature of the refrigerant to approximately 140° F. After the compressor, the refrigerant passes through the domestic hot water heater to heat up the building’s water supply. Next, the refrigerant heats the building as it releases latent heat energy and re-condenses in a

refrigerant-to-air or a refrigerant-to-water heat exchanger. From there, refrigerant passes through an expansion/metering device before it returns to the water/refrigerant heat exchanger connected to the ground loop.4

How It Works

154: BACKGROUND

Figure 8b

Figure 8c

Figure 9: Components of Geothermal System

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 16: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

16 4: BACKGROUND

The following are definitions of terms commonly used in this report.

Bore: A hole drilled into the ground for vertical closed loop system pipes. The depths of bore holes usually range from 100 to 500 feet and are dependent on the geology of the locality and the capacity the building requires.

Load: The amount of heat a residential unit requires in order to have a comfortable temperature.

Right- of-way: A parcel of land that the City grants, through an easement or other mechanism, for the installation, maintenance, or expansion of existing public services. In Ann Arbor, the right-of-way should be the volume of space occupied by the infrastructure as well as a risk zone, determined by staff based on the type of infrastructure and the risk associated with that infrastructure failing.

Neighborhood Homeowners’ Association (HOA): A voluntary organization of residents who work

together to construct and manage common properties as defined under section 528(C) (1) of the tax code. It takes the form of a non-profit corporation or unincorporated association, enhancing the sense of community in the neighborhood.

Neighborhood Improvement Association (NIA): A community development corporation established to promote positive change by improving physical, economic, and social conditions. This association usually relates to neighborhood transformation and community development.

Special Assessment District: A district that is set up for property owners to reimburse the City over time for all expenses related to any design and installation of public projects that benefit the property owners in the district. Each individual property owner pays a part of the overall cost based on the assessed value of their property as a percentage of the assessed value of all the properties in the assessment district.

Definitions

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 17: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

The U.S. Environmental Protection Agency and De-partment of Energy endorse geothermal heat pump sys-tems as one of the most energy-efficient and environ-mentally friendly heating, cooling and water heating systems available. Geothermal energy is a cost-cutting way to reduce our dependency on coal and fossil fuels. For example, geothermal systems can save homeown-ers 30-70% on heating and 20-50% on cooling. There is also a high customer satisfaction rate: over 95% of geothermal users would recommend it to others. Cur-rently, there are about 15,000 working geothermal heat pump systems in Michigan homes, schools, office buildings and hotels. Also, Southeast Michigan geo-thermal consumers are eligible for federal, state and local incentives.

Toledo ZooIn 2008, the Toledo Zoo committed to use geother-mal energy to keep the zoo’s aquarium at the correct temperature and aimed to reduce its carbon footprint by 400,000 pounds, or 38% annually. This will cut down the utility cost by $25,000 each year. The Zoo’s geothermal system will use thirty-two 300 foot wells, which will then be connected to three 20-ton water source pumps and two ultra-high efficiency hot water boilers.

Dexter, MichiganA 2-story house was built in Dexter, Michigan in 2002. It was an Energy Star certified building of approxi-mately 1,800 square feet. A horizontal closed loop geothermal system was installed in 2004 after which the projected cost for heating and cooling was approxi-mately $920 a year.

Farmington Hills, MichiganA 2-story building with total square footage of 4,401 was built in 2001 with a steel insulated basement, dou-ble-pane low-e glass windows, and a four-ton geother-mal system. This system keeps hot water costs around only $540 a year.

SOURCES1. Kavanaugh, Kelli. “Drilling Deep: Geothermal

Heat.” Metromode.com. 15 Nov. 2007. Web. 23 Apr. 2011. <http://www.metromodemedia.com/features/Geothermal0046.aspx>.

2. Michigan Hydron and Michigan Energy Services Geothermal Solutions. Web. 23 Apr. 2011. <http://michiganhydron.com/casestudies/casestudy/4>.

3. “City Hall Revitalization, Programs and Projects, Sustainable Farmington Hills, Michigan (MI).” Official Government Website of the City of Farmington Hills, Michigan (MI). Web. 23 Apr. 2011. <http://www.fhgov.com/SustainableWeb/ProgramsProjects/CityHallRevitalization.asp>.

4. “DTE Energy - Geothermal Systems.” DTE Energy - Home Page. Web. 23 Apr. 2011. <http://www.dteenergy.com/residentialCustomers/prod-uctsPrograms/electric/geothermal.html>.

Figures8. “GEOTHERMAL.” Indiana Energy Systems. Web. 23 Apr. 2011. <http://indianaenergysystems.com/geothermal/geothermal.htm>9. “Geothermal Heat Pumps Up 50% In Canada.” Matter Network Clean Technology, Green News and Sustainable Business News. Web. 24 Apr. 2011. <http://www.matternetwork.com/2008/9/geothermal-heat-pumps-up-50.cfm>.

Why Geothermal? Success Stories from the Midwest

• Geothermal systems can save homewoners 30-70% on heating and 20-50% on cooling com-pared to conventional systems.

• DTE reduces electrical rates for homes that use geothermal systems by roughly half the amount of conventional sys-tems.

• Geothermal completely elimi-nates the need for natural gas, ending dependence on a a resource that will not have a consistent price in the future.

174: BACKGROUND

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 18: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

5: Lessons LearnedCase Studies

18 5: LESSONS LEARNED

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

PARK CHASE APARTMENTS, OKLAHOMA

Main Lessons:• Mass installation of individual bores can be cost-

effective.• Make sure the units are weather-proofed to

decrease energy needs.

Park Chase is a 64-building complex of 348 apartments in Tulsa, Oklahoma. The US Department of Housing and Urban Development (HUD) bought the complex and retrofitted it with geothermal heat pumps, since the current heating and cooling system needed replacing. HUD was able to lower initial costs by decreasing the load by weather-proofing the apartments, a decision that saved over $150,000 on the project overall. The cost per unit was about $3828, but HUD owned the utility (paid for it and received the incentives), even though each resident received a thermostat. After incentives, the cost per unit was $3219. Note, however, that the size of the units was from 650 to 962 square feet, smaller than the houses in Huron Highlands. Weather-proofing the units prior to installing geothermal in Park Chase saved $957 per unit. (Appendix C)

KLAMATH FALLS, OREGON

Main Lessons: • Start with public spaces and expand to residences.• Consider installing heated sidewalks and roads

along with the geothermal indoor heating.

Klamath Falls’ implementation of the geothermal energy implements the legal and technical issues the City can expect when introducing a new energy utility system. Klamath Falls, like The City of Ann Arbor, decided to research alternative heating and cooling systems to provide a cleaner, more efficient energy source to the businesses and residents. The geothermal system initially connected to fourteen county or public buildings, including the County Museum, Fire Station, Post Office, City Hall, City Hall Annex, County Library, County Courthouse, Old County Jail, County Offices, County Annex and 120 residences.5 The City began an extensive marketing campaign to connect more customers to the system and the system gained a substantial amount of customers since. In 1994, the system grew to include heating of sidewalks and roads by utilizing buried tubes of antifreeze keeping them snow and ice free in mild winter conditions.

Page 19: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

ENO COMMONS, NORTH CAROLINA Main Lessons:• Get a lower installation price by installing the entire

neighborhood at once.• Residents should expect little noise from a geothermal

system.• With scarce land, vertical loop systems make more sense.• Determine the level of enthusiasm or apathy among the

residents.

Eno Commons is a cohousing community of 22 energy-efficient houses located in Durham, North Carolina. In the mid-1990s, 22 families gathered to design a new community. They adopted an individual bores geothermal system, saving them up to 60 percent of their electric heating bills and 40 percent on their cooling as compared to conventional systems. After the geothermal installation, the average electricity bill in each home was about $35 per month. The total savings on utility bills for each household is projected at $1,100 a year.

Eno Commons got a low installation price from Evangelist Service Company by installing the system for the entire neighborhood.

In Eno Commons, the first two homes used horizontal borings, which involves digging a trench in a horizontal direction, and takes up a large area of land. However, the developer learned that the continual adoption of horizontal boring for the remaining homes would be impossible as the trench length needed would cause damage to rocks and trees that the community wanted to preserve. Therefore, the developer switched to a vertical bore for the remaining 20 homes because vertical loops require little land. One additional advantage of geothermal system is that it is a completely silent system, which is great for Eno Commons residents who value tranquility. Residents

were impressed by the system and commented that the heat pump in each house generates no more noise than a refrigerator. The entire Eno Commons neighborhood participated in this installation, adding to this case’s success. (Appendix C)

PRINGLE CREEK, OREGON

Main Lessons: • Form a marketable identity as a green neighborhood.• A large loop system works best for new neighborhoods or

redesigned and rebuilt neighborhoods.

The Pringle Creek Community in Salem, Oregon introduced a community geothermal system, and has received various awards for sustainability. Sustainable Development Inc. (SDI), a local developer, bought 32 acres of the site from the state in 2004. In order to realize sustainable energy use, the Pringle Creek Community converted a well into a source for a GHPS water distribution system.1 The community laid the GHPS (Geothermal Heat Pump System) district loop by using “a supply piping system within the street right of way”2 to distribute 59-degree water throughout the year to 70 residential lots and the Village Center. Each house can extract and release the heat through an individual heat pump. People can also use water in a GHPS for irrigation. The Opsis’ case study claims, “The [GHPS] system is approximately 300% more efficient at delivering heat than a gas furnace.”3

Pringle Creek’s GHPS district loop is highly regarded in the market. Natural Home magazine mentions that this district loop in America’s Top 10 Best Green-Build Neighborhoods in 2010.4 the community adopts an open loop system with vertical boreholes, using water as medium of the heat. Even though the community installed the district loop, residents can choose between the GHPS and a conventional gas furnace. (Appendix C)

195: LESSONS LEARNED

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 20: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

Neighborhood Improvement Authority

20 6: IMPLEMENTATION TOOLS

6: Implementation ToolsNEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

The Public Act of 2007 enables the City of Ann Arbor to establish Neighborhood Improvement Authority (NIA). NIA can improve public facilities such as rights-of-way, utilities lines, or pipes and provide many ways to raise funds by donation, revenue bonds, revenue from leased assets, tax increments, special assessments, and grants.1

Preparation1. To form an NIA, the applicants must submit two

documents to The City of Ann Arbor.2. A development plan that “describes the costs, location

and resources for the implementation of the public improvements”2 planned in the NIA district.

3. A tax increment financing plan that provides the details of the “tax increment procedure, the amount of bonded indebtedness to be incurred and the duration of the program.”3

Financing sourcesSection 125.2921 stipulates financing sources of NIA as follows.1. Donation to the authority2. Revenue bonds, which are “municipal bonds that are

secured by specific income”of the NIA. These bonds are intended to “finance income-producing projects”4 in the NIA.

3. Revenues from assets owned or leased by the NIA4. Tax increment financing (TIF), which allows

municipalities to levy property taxes for increased asset value in the NIA, which is one step beyond the

base asset value set at the beginning of the project.5

5. Special Assessment: The Home Rule City Act of Michigan (Section 117.4a) allows cities to assess the property values against public projects introduced in Special Assessment District in order to finance the project.

Forming the NIA6

The governing body finds that the NIA is “in the best interests of the public to: 1. promote residential growth in an area where 75% or

more of the area is zoned for residential and promote economic growth.”7

2. The governing body holds a public hearing, notifying the public of the hearing since tax payers in the district would be affected and the governing body would levy taxes on tax increment values.

3. The NIA adopts the resolution of the creation within 60 days of the public hearing.

4. The chief executive officer of The City appoints members of the NIA. A majority of the governing board of the NIA consists of property or business owners in the area.

NOTE: At least one member of the governing board must be a resident in the area.

Page 21: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

PACEIn December 2010, the Michigan Legislature passed Enrolled House Bill No. 5640, which allows local municipalities to establish Property Assessed Clean Energy (PACE) districts to finance energy-efficiency improvement projects on commercial and industrial properties through various financial schemes. The City of Ann Arbor is planning to introduce PACE in the fourth quarter of 2011.8

PACE districts can use various financial schemes, such as bonds, TIF, and SAD, to provide financial supports for energy-efficiency improvement projects in the district. However,Michigan law limits the application of PACE to commercial and industrial properties. In order to promote energy efficiency in residential areas in Michigan, Michigan legislature needs to adjust Enrolled House Bill No. 5640 to allow local municipalities to apply PACE to residential areas.

Property Assessed Clean Energy (PACE) Districts

216: IMPLEMENTATION TOOLS

Figure 10: PACE National Map. Michigan was authorized in 2010 to establish PACE for Commerical and Industrial properties only.

6: Implementation ToolsNEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 22: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

Homeowners’ Associations

22 6: IMPLEMENTATION TOOLS

Special Assessment DistrictsThe City of Ann Arbor has the authority to implement a Special Assessment Districts (SAD) to reimburse the costs of large-scale public projects. Residents located in the SAD will have had to benefit from the public project in some form. The Ann Arbor Code of Ordinances outlines the process in Chapter 12: Financial Local Public Improvements and Chapter 13: Special Assessment Districts.

City Council can create the resolution or residents wishing for city funding of a public project can submit a petition to initiate the SAD forming process themselves. Residents need the petition on the form approved by the city administrator and furnished by the city clerk.11 Advised by this petition, the city council will decide whether the improvement requested is necessary and how to cover the costs based on the plan prepared by the City Administrator.12

Following receipt of a special assessment roll, the City has to hold a public hearing. The City gives notice to all the related persons not less than 10 days prior to the hearing.13 The City hears all the related persons in the district, and receives oral or written objections to the district. The City Council may correct the special assessment based on this hearing.14 The residents can request an adjustment of the district’s boundary according to those benefited by the project. The final determination of who receives benefits from the project is decided by the City Council.

Once the SAD is established, the project is regarded as partnership between the City of Ann Arbor and the residents. The residents may submit a request to stop the project before the City Council adopts a final resolution, however, the City has final say in the matter.

A Homeowners’ Association is form of a non-profit corporation or unincorporated association, created and managed in the similar way as other corporations.

Legal StatusA Homeowners’ Association is a resident organization set up to construct and manage common properties of the residents as defined under section 528 (c)(1) of the tax code.9

HOAs provide services to residents, regulate activities, and levy association fees in order to manage common properties. Residents can form a Homeowners’ Association by the following process:10

1. Name the organization.2. Elect a director of a Homeowners’ Association

and a board of directors.3. File its incorporation with the State corporate

filing office.4. Establish by laws.5. Set the fee.6. Hold a Homeowners’ Association meeting to

appoint a board of directors and approve by laws of a Homeowners’ Association.

Once incorporated, a Homeowners’ Association manages the residents’ common property in order to improve the life in the community, following the rules the residents establish. A Homeowners’ Association can also hire property managers.

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 23: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

236: IMPLEMENTATION TOOLS

Financing

Tax IncentivesThe Homeowners’ Association can receive tax incentives provided by the American Recovery & Reinvestment Act of 2009 and the Emergency Economic Stabilization Act of 2008. This tax incentive can deduct 30% of the total invest-ment costs, if installed by December, 2016. 15

Home Energy LoansProvided by Michigan Saves, a nonprofit organization, this unsecured loan can supply $1,000 to $12,500 to the residents of Huron Highlands for “Energy-saving improve-ment.”16

Energy Star FinancingMany private institutions offer incentive financing for En-ergy Star products. Some geothermal heat pumps are En-ergy Star certified and therefore qualify for such financing.17

Rebate Programs by Non-Governmental Organizations (NGOs)Finally, some NGOs offer rebate programs to promote Geo-thermal Heating Pump systems. For example, Great Lakes Energy offers a $500 rebate for the introduction of a GHP system.18

Listed below are types of financial aid for geothermal systems.

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 24: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

24 6: IMPLEMENTATION TOOLS

Local Geothermal ContractorsAspen Heating and Cooling Inc 4131 W Michigan Ave, Jackson, MI 49202-1830517-750-0200; [email protected]

Blanket Insulation 23555 Northwestern Hwy Ste 202 Southfield, MI 48075-3337 248-358-5835; [email protected]

Diversified Heating & Cooling Inc 20789 Parker, Farmington Hills, MI 48336-5151 [email protected]

Flame Furnace Company 2200 E 11 Mile Rd, Warren, MI 48091-1088 586.582.1700; [email protected]

Green Building Designs LLC7181 Larme Ave Allen Park, MI 48101-2468 877-600-9007; [email protected] www.usgbd.com

Haley Mechanical LLC 1525 Baker Rd, Dexter, MI 48130-1601

734-424-9710; [email protected] www.haleymechanical.com

Hutzel Plumbing & Heating Co 2311 S Industrial Hwy Ann Arbor, MI 48104-6125 734-655-9111; [email protected] www.hutzelplumbing.com

Lakeside Service Company4367 S Old US Highway 23Brighton, MI 48114-8604 810.227.2719; [email protected] www.lakesideservice.com

Meadowlark Energy LLC179 Little Lake Rd, Ann Arbor, MI 48103-6200 734.619.8024; [email protected]

Michigan Energy Services8445 Main Whiltmore Lake, MI 48189 888-339-7700; [email protected]/about

Mechanical Energy Systems Inc 8130 N Canton Center RdCanton, MI 48187-1326

734-453-6746; [email protected] www.mes1.com

Miller’s Nu-Tech Plumbing & Heating 15340 S Telegraph Rd Monroe, MI 48161-4070734-241-5817; [email protected] www.millersnutech.comNational Heating & Cooling,Inc. 23660 Grand River AveDetroit, MI 48219-3128 313-538-7100; [email protected] www.NationalHeating.com

Pat Walters & Sons 636 S Mansfield St Ypsilanti, MI 48197-5167734-483-5811; [email protected] www.patwaltersandsons.com

Robertson-Morrison Inc 4721 Runway Blvd Ann Arbor, MI 48108-9558 734-662-3141; [email protected] www.rob-mor.com

Slasor Heating & Cooling, Inc. 33504 Five Mile Road Livonia, MI 48154-2862 734-266-5475; [email protected] www.slasorheating.com

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 25: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

256: IMPLEMENTATION TOOLS

Sources Consulted

1. Michigan Economic Development Corporation Website. Neighborhood Improvement Authority. 2008 <http://www.michiganadvantage.org/cm/Files/Fact-Sheets/NeighborhoodImprovemen-tAuthority.pdf>

2. Michigan Economic Development Corporation Website. Neighborhood Improvement Authority. 2008 <http://www.michiganadvantage.org/cm/Files/Fact-Sheets/NeighborhoodImprovemen-tAuthority.pdf>

3. Morningstar. Inc. website <http://www.morningstar.com/news-classroom-course-13/5394/2.shtml>

4. Morningstar. Inc. website <http://www.morningstar.com/news-classroom-course-13/5394/2.shtml>

5. National Association of realtors. Tax increment financing (TIF). Robinson&Cole LLP. Boston, MA.2002.

6. Michigan Economic Development Corporation Website. Neighborhood Improvement Authority. 2008 <http://www.michiganadvantage.org/cm/Files/FactSheets/NeighborhoodImprovemen-tAuthority.pdf>

7. Michigan Economic Development Corporation Website. Neighborhood

Improvement Authority. 2008 <http://www.michiganadvantage.org/cm/Files/FactSheets/NeighborhoodImprovemen-tAuthority.pdf>

8. The City of Ann Arbor website <http://www.a2gov.org/government/publicser-vices/systems_planning/energy/Pages/PACE.aspx>

9. 26 U.S.C.§528. Mortgage News Daily website <http://www.mortgagenewsdaily.com/wiki/Form_HOA.asp>

10. 501 (c ) (4) Tax Exempt Homeowners Associations Website <http://www.501c4taxexempt.com/>

11. The Code of Ordinances of the City of Ann Arbor. Section 1.273 of Chapter 12.

12. Ibid. 1.284 of Chapter 1313. Ibid. 1.289 of Chatper 1314. Ibid. 1. 291 of Chapte 13 15. 2011 Federal Tax Credits for Consumer

Energy Efficiency. Energy Star Website. http://www.energystar.gov/index.cfm?c=tax_credits.tx_index#7

16. Michigan Saves Home Energy Loan Facts. Michigan Saves Website. http://www.michigansaves.org/Customers/Homeowners/MichiganSavesHomeEn-ergyLoanFacts.aspx

17. New Homes Partner Incentives in Mich-

igan. Energy Star. U.S. Environmental Protection Agency – U.S. Department of Energy website. http://www.energystar.gov/index.cfm?fuseaction=new_homes_partners.showIncentives&s_code=MI

18. Database of State Incentives for Renewable & Efficiency Web-site <http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=MI25F&re=1&ee=1>

FiguresFigure 10: Property Assessed Clean Energy Financing US Map. Digital image. DSIRE. US Department of Energy, 16 Mar. 2011. Web. 18 Apr. 2011. <http://dsireusa.org/userfiles/image/summarymaps/pacefinanc-ingmap.gif>.

p. 23 Logos: http://www.recovery.govhttp://www.michigansaves.orghttp://www.energystar.govhttp://www.gtlakes.com

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 26: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

The City of Ann Arbor is home to eco-friendly city officials, residents, and university scholars and students. Appropriately, The City’s residents wish to reduce their overall carbon footprint and dependency on fossil fuels. Geothermal energy is one of many efficient energy alternatives to further explore. Following are the barriers and recommended solutions for the City regarding neighborhood geothermal implementation.

Barriers

PhysicalThe City of Ann Arbor, founded in 1824, consists of a denser downtown area and a less dense but nearly fully built out land area to the city’s edge. The downtown and surrounding areas are heavily influenced by the automobile and therefore have a vast network of streets and the necessary complementary infrastructure. This results in limited areas of easy drilling access for installing geothermal wells and lines, especially large loop systems.

LegalThe City of Ann Arbor must make sure it has the authority to create a utility, drill in resident property, and replace any current utility system. Even though the State Constitution grants the City many powers, the City officials must be careful to follow the laws as to avoid any type of expensive litigation.

FinancialAny geothermal implementation will require funding, and projects on the City scale require a hefty initial equity investment. City funds primarily come from federal grants and property taxes. With the recent housing crash and economic downturn, the City has a reduced cash flow. Additionally, any funding resulting in an increased tax must be approved by the City residents.

Ownership and MaintenanceAny large scale utility will need a professional maintenance and management system in place. The City currently has no experience with such an entity and will need to either source it out or hire and train its own. Either way will incur costs and require voter approval.

Community InterestCommunity approval is vital in a large scale geothermal implementation. Not only will the residents provide funding through taxation, but they will also be the users and must approve of the new responsibility. Additionally, the City officials will need to mitigate any concerns over increased costs and construction.

267: GEOTHERMAL FOR THE CITY OF ANN ARBOR

7: Geothermal for the City of Ann Arbor

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 27: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

PhysicalThe City will need to adapt the geothermal system to the physical characteristics of the building and property type. For example, if The City wishes to implement a geothermal system into a new construction neighborhood project then a large loop system seems the most practical and efficient. If the city retrofits an older neighborhood with established infrastructure and built environments, individual wells for each home are recommended. Commercial properties will need to proceed on a case-by-case basis with available open space being the largest loop system determinant.

LegalThe City of Ann Arbor has the authority and responsibility to ensure the functioning of utilities in The City boundaries. Additionally, The City has the authority to create its own utility by implementing a large-scale geothermal project and charging its users usage fees.

Ownership and MaintenanceBe open and communicative about the system to all potential customers. Decide if you need to create a professional staff to provide retrofitting estimates, technical

information, and promote the system.

Financial The City will implement a different funding structure depending on property type. PACE financing is applicable to commercial and industrial properties. The City can create a NIA for a non-historic residential neighborhood and utilize one of the six financing methods allowed for NIA’s. The City can create a SAD for a historic residential neighborhood that wishes to implement geothermal systems. If the City creates the system and runs it as a utility, it should consider the following actions: • Switch from a metered system to a flat

rate system, which can amount to a reduction of 50% in heating costs for the users and eliminate the need for users to install a meter.1

• Research into state and federal grants that could help subsidize the cost of the system for potential customers, this especially holds for NIA districts.

• Guide residents through the grant application process.

Additionally, there are some outside sourc-es of funding specifically for cities:

Renewable Energy Equipment Leasing (REEL)1

• For Tax-Exempt, Non-Profit, and Fed-eral Government Agencies

• Emphasizes renewable and alternative energy systems

• Low interest rates, flexible terms(2- 15 years), and hedges against inflation

• 100% financing, $25k and up (no limit)• Equipment must be for public purpose• Lessee qualifies under section 103 of

the Internal Revenue Code of 1986

GEO SUN NRG2

• Lease to the City the geothermal equipment, anywhere from $5,000 to $5,000,000

• Lease to the homeowner up to $50,000

For a cost analysis worksheet, which aids the city in estimating the cost of neighborhood geothermal per household, see Appendix B.

277: GEOTHERMAL FOR THE CITY OF ANN ARBOR

7: Geothermal for the City of Ann Arbor Recommended Solutions

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 28: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

The case studies determined that community support is a vital part of large scale implementation. The followings are general best practices for working with the public:

• Create a Public Awareness Program Gather support from as many citizens and local authorities as possible, and create an advisory board in charge of educating the public and directly communicating with and providing answers to the public.

• Create Test Programs Conduct research and provide a database of all information pertaining to the geothermal capacity of the expected land to be used.

• Prepare Mitigation Measures Hire outside legal assistance to form a permanent program to deal with property, land use, insurance, and other legal issues.

• Identify Statutory Authority Early in the process, create a legal implementation process and make research and incentives information available to the public. Additionally, prepare for potential future users of the system by having a streamlined process and incentives in place

• Prepare a Market Analysis Provide a list of potential users, system capacity, maximum capacity, weather patterns, and different average heating and cooling usages throughout the day in the analysis.

• Establish City Credibility Provide long-term contracts to lock in rates to prevent residents

from having to face unexpected price hikes.

• Develop and distribute a survey inquiring about interest in participating in a neighborhood geothermal system. Include:

1. Name2. Address3. Rent or Own4. Square footage of house5. Gas Bills (average in winter, average in summer)6. Electricity Bills (average in winter, average in summer)7. Rate interest in participating (1-5)8. Amount willing to invest9. Rate interest in creating NIA, SAD, HOA10. Preference for fixed cost or capital cost11. Comments

28

Community Involvement

SOURCES1. “Government, Municipality, and Tax-Exempt Leasing.”

Renewable Energy Equipment Leasing - Improve Li-quidity, Preserve Cash Flow, and Increase Efficiencies. Web. 18 Apr. 2011. <http://www.thinkreelgreen.com/lease/municipality.html>.

2. “Geothermal Financing: Residential & Commercial Geothermal Energy Costs: Geosun NRG.” Geosun NRG: Geothermal Financing, Design & Marketing: Renewable Energy Sources. Web. 18 Apr. 2011. <http://www.geosunnrg.com/financing/>.

7: GEOTHERMAL FOR THE CITY OF ANN ARBOR

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 29: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

from having to face unexpected price hikes.

• Develop and distribute a survey inquiring about interest in participating in a neighborhood geothermal system. Include:

1. Name2. Address3. Rent or Own4. Square footage of house5. Gas Bills (average in winter, average in summer)6. Electricity Bills (average in winter, average in summer)7. Rate interest in participating (1-5)8. Amount willing to invest9. Rate interest in creating NIA, SAD, HOA10. Preference for fixed cost or capital cost11. Comments

A group of eco-conscious residents from Huron Highlands neighborhood, which is in north Ann Arbor, wishes to explore geothermal energy to eliminate their dependence on natural gas. Their initial research resulted in cost and financing estimates that were too expensive and devoid of any public financing. The residents requested further study and evaluation of a larger neighborhood geothermal installation utilizing public and private financial assistance. The following are barriers and recommended solutions for Huron Highlands regarding geothermal implementation.

BarriersPhysical The Huron Highlands neighborhood consists of roughly 100 single-family residences separated by various boundaries such as lot lines, streets, sidewalks, and a public park. Installing anything in the public right-of-way requires a permit. Additionally, underground utility lines run throughout the neighborhood. Anyone drilling underground must be mindful of disrupting of any of these items.

LegalThe City of Ann Arbor requires a drilling permit before any in-ground drilling takes place. Also, the disruption of any public infrastructure such as a street or sidewalk incurs additional permits and greater city involvement.

FinancialAccording to local and national geothermal retailers, installing an individual geothermal heating and cooling system can become quite costly. Depending on home size and heating requirements, a single home system can cost between $15,000 and $30,000 for the drilling and installation of the piping and for the purchase and installation of the heat exchange pump.

Ownership and MaintenanceHuron Highlands residents must accept the ownership responsibilities of a large geothermal system if they choose to run the system as a neighborhood. If they create a large loop system, someone will have to operate and maintain it. This requires funds and professional knowledge.

Community InterestPerhaps the greatest barrier is that without the support of enough individuals, any kind of large scale installation becomes nearly impossible.

8: Geothermal for Huron Highlands

298: GEOTHERMAL FOR HURON HIGHLANDS

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 30: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

Recommended SolutionsPhysicalSince Huron Highlands is an established neighborhood with utility lines, streets, and sidewalks, the costs of replacing any such items after drilling makes the a large loop system less economically feasible. Instead, we recommend the residents take advantage of individual vertical wells in each yard. This will reduce repair costs and allow for a faster process.

Legal The necessary permits to drill across property lines and under public infrastructure, as would be needed for a large loop system, are costly, time consuming, and not guaranteed. Again, drilling for individual wells in each home bypasses the complexities of digging under or through public property. There are three ways to implement geothermal: individuals obtain their own permits to install geothermal on their own land, an LLC or Homeowners’ Association obtains the permits and installs it (individual meters are still possible in this scenario), or the City installs the system after making Huron Highlands a Special Assessment District. This final option is sometimes difficult to pull off, especially since SADs usually create public benefits from public improvements, and some may argue that this is a private improvement resulting in a private benefit for the residents.

FinancialHuron Highlands can take advantage of the economies of scale by implementing a large scale drilling process during a single drilling period. This can reduce the overall installation of the piping. The residents can also get more funding options by forming a Neighborhood Improvement Authority with the City, as explained in Section 5: Implementation Tools.

30

Figure 12: Illustrated representattion of individual bores in Huron Highlands

Figure 11: Illustrated representation of Large Loop System imposed over parcel map of Huron Highlands.

8: GEOTHERMAL FOR HURON HIGHLANDS

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 31: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

31

After filling out the cost analysis worksheet with Huron Highland’s situation in mind and with conservative estimates, we determined that the monthly cost, $145.00, and the upfront cost after rebate, $0.00, indicated a favorable financial position for Huron Highlands to implement geothermal. The monthly payments would be below the current average heating bills in Huron Highlands. This monthly payment, after ten years, would decrease to $65.00. After twenty years, the geothermal system would be paid off and there would be no monthly bill for heating.

Heat Exchange Pump and InstallationA. Homeowner’s Financial Contribution: $3000.00B. Average Household Square footage: 1000 – 1500 sqft : $10,000C. Loan Amount: = $7000.00D. Monthly Loan Payment Per $1000 = $12.13E. Total Monthly Payment per Household: $84.91F. Tax Rebate: $3000.00G.Total Contribution after Tax Rebate: $0.00

Drilling and Geothermal GridH. Number of Homes with Individual Wells Drilled: 24I. Individual Wells Drilling Costs: 20 – 40 Homes: $9,500 eachJ. Total Drilling Cost: $228,000K. SAD Monthly Payment per $1000: $6.33L. Monthly Payment Per Household: $60.14

TOTAL MONTHLY PAYMENT PER HOUSEHOLD: $145.00TOTAL UPFRONT COST PER HOUSEHOLD (AFTER REBATE): $0.00

Cost Analysis Worksheet: Huron Highlands

Number of Years

Mon

thly

Cos

t ($)

Figure 13: Graph of the costs and savings of switching to geothermal. The green line represents the rising cost of natural gas by inflation. The red represents payments of the geothermal loans going down over time. The green line represents savings.

8: GEOTHERMAL FOR HURON HIGHLANDS

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 32: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

18 of the 24 residents sur-veyed were willing to invest $1000-5000 into a geothermal system for their homes.

32 8: GEOTHERMAL FOR HURON HIGHLANDS

Community InvolvementA community interest survey gathered general information from the residents of Huron Highlands, containing questions about current utilities bills, willingness to invest in geothermal, concerns about neighborhood geothermal installation, and pace of billing. Twenty-four residents completed the survey.

The results showed that the average house size was approximately 1190 square feet and that residents paid an average of $152 for winter heating bills and $129 for the summer utilities. On average, the residents showed most interest in connecting to a neighborhood geothermal loop system; second to this response was willingness to switch to geothermal in general in the next few years. The greatest concern among the residents was for capital cost. Second to this was the amount of savings that the geothermal system would create in the long run. 18 of the 24 residents surveyed were willing to invest $1000-5000 into a geothermal system for their homes, and 4 of these 18 residents were willing to invest between $5000 and $10,000. (See Appendix A for survey used.)

Residents may want to distribute a more detailed survey based on the recommendations of this report.

SOURCES

Figure 11: Copyright 2005 The City of Ann Arbor, MichiganFigure 12: Copyright 2005 The City of Ann Arbor, MichiganFigure 13: Rendering by Alex DeCamp

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 33: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

9: Appendices

33APPENDICES

NEIGHBORHOOD GEOTHERMAL SYSTEMS FOR ANN ARBOR

Page 34: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

APPENDIX A: SURVEY

APPENDIX A: SURVEY34

Geothermal Interest Survey We are a group of graduate students majoring in Urban Planning at University of Michigan. In conjunction with the City of Ann Arbor Systems Planning Unit, we are working on a project that explores the feasibility of implementing a community geothermal heating system in Huron Highlands. We would appreciate your help in completing this survey and your response will strictly be kept as confidential. Thank you very much.

1. Please provide your name and address.Name: Address:

2. What type of furnace do you have?• Boiler• Furnace• Heat Pump• Other

3. When was your furnace last replaced?• 0-5 years ago• 6-10 years ago• 11-15 years ago• 15+ years ago

4. If you have air conditioning, what type do you have?I do not have air conditioning• Central Air (Don’t know which refrigerant)• Window Unit

• Check if you know you have R-410A refrigerant• Check if you know you have R-22 5. What is the square footage of your house? (Estimate if needed)__________ 6. On average, how much is your heating bill during winter months (Nov-March)?• Below $100• $100-$150• $150-$200• Above $200 7. On average, how much is your energy bill during summer months (May-Sep)?• Below $100• $100-$150• $150-$200• Above $200• 8. Please rate how much you agree with each statement. Agree Somewhat Agree Not Sure Somewhat Disagree Disagree • I would be willing to switch to Geothermal heating and cooling in the

next few years.• I would be willing to switch to geothermal and connect to a

neighborhood system in the next few years.• I would be willing to share a utility bill with my neighborhood

community.

Below is the survey we distributed to the Huron Highland residents door-to-door and by link via e-mail.

Page 35: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

35APPENDIX A: SURVEY

Below is the survey we distributed to the Huron Highland residents door-to-door and by link via e-mail.

• I would rather pay a higher initial cost than spread the cost over a long period of time.• I would rather spread the cost of geothermal as a monthly bill over a long period of time than

pay a higher initial cost. • I would rather spread the cost of geothermal as a monthly bill over a long period of time than

pay a higher initial cost.

9. Households and communities who switch to geothermal can get grants and incentives to do so. If you would be willing to invest in geothermal, how much would you be willing to invest?• $1000-5000• $5000-10,000• More than 10,000

10. Rate your the level of concern of the following: Very Concerned Somewhat Concerned Not Sure Not Concerned • Noise level of geothermal system• The amount of capital cost invested in the geothermal system • The amount of savings expected after the installation of the geothermal system• Effect of installation on the neighborhood

Powered by SurveyMonkey

Page 36: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

36 APPENDIX B: COST ANALYSIS WORKSHEET

Heat Exchange Pump and InstallationA. Homeowner’s Financial Contribution: ______________B. Average Household Square footage: 500 – 1000 sqft : $8000 1000 – 1500 sqft : $10,000 1500 – 2000 sqft : $12,000 2000 + sqft: $14,000C. Loan Amount: B – A = ____________D. Monthly Loan Payment Per $1000 = $12.13____E. Total Monthly Payment per Household: (C/1000) X D = ________F. Tax Rebate: 30% X B = _______G. Total Equity Investment: A – F = _________

Drilling and Geothermal GridH. Number of Homes with Individual Wells Drilled: ______I. Individual Wells Drilling Costs: 0 – 10 Homes: $10,500 each 10 - 20 Homes: $10,000 each 20 – 40 Homes: $9,500 each 40+ Homes: $9,000 eachJ. Total Drilling Cost: A X B__K. SAD Monthly Payment per $1000: $6.33___L. Monthly Payment Per Household: ((C /1000) X D)/A_____

TOTAL MONTHLY PAYMENT PER HOUSEHOLD: E + L = ________TOTAL EQUITY INVESTMENT PER HOUSEHOLD: G = __________

APPENDIX B: COST ANALYSIS WORKSHEET

• The cost analysis worksheet is based on in-stalling individual systems on a neighborhood scale at 2011 prices. Costs for a large loop system could vary dramatically. Additionally, two items are not factored into this worksheet.

• The homeowner will experience an increase in electricity usage due to the addition of a heat exchange unit. However, DTE Energy will in-stall a separate meter for this unit and charge at a lower rate for electricity. Due to the vari-ability of heating and cooling habits, an exact cost for electrical usage is impossible.

• The federal government offers a tax rebate on the total installation of the geothermal system, including drilling. The neighborhood should work with the city to make sure that rebate gets applied to pay the Special Assessment District.

Page 37: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

PARK CHASE APARTMENTS, OKLAHOMA

This memorandum summarizes a case study relevant to the implementation of a geothermal system in Ann Arbor neighborhoods. Park Chase is a 64-building complex of 348 apartments in Tulsa, Oklahoma, that the US Department of Housing and Urban Develop-ment (HUD) bought and retrofitted with geothermal heat pumps, since the current heating and cooling sys-tem needed replacing. Park Chase needed to figure out how to lower initial costs of the installation of geother-mal heat pumps. HUD was able to lower initial costs by decreasing the load (amount of heating and cooling required) by weather-proofing the apartments, a deci-sion that saved them over $150,000.1 This memoran-dum will describe the background of Park Chase, how HUD chose to implement the geothermal system, the costs and benefits, and how the case study relates to the proposed geothermal system for Huron Highlands.

Main Details• The system was a 543-ton Closed Loop GHP Sys-

tem with each heat pump sized to meet expected load requirements.

• Each heat pump connected to a vertical ground loop in its own bore, or vertical hole, 250 to 340 feet deep, located between the housing unit and sidewalk.

• Total savings in energy costs for Park Chase apart-ments was $60,000 dollars per year, an average of 50% savings per unit.

• The project began in 1991 and was fully complet-ed in July 1996.

BackgroundPark Chase apartments cover 27 acres in Tulsa, Okla-

homa. In the 1980s, the apartments’ electric chillers were 27 years old and the gas boilers were leaking, perhaps one reason the occupancy was declining dur-ing this decade. In 1991, HUD repossessed the prop-erty with plans to renovate. Members of HUD and the Public Service Company of Oklahoma (PSO) lobbied to install individual geothermal heat pumps for each unit. At the time, geothermal heat pumps were less fa-miliar, and conservative leaders in the area were not convinced that this system would be beneficial. HUD decided to investigate all possible options, including gas hydronic systems with individual air conditioners, electric furnaces, gas furnaces, air-cooled heat pumps with gas or electric back up, and water-to-water heat pumps.2

Costs & SavingsThe two main candidates for the replacement heating and cooling system were geothermal and gas hydronic. A comparison of their costs is in the table at the end of this section. Overall, the geothermal system cost less, and HUD went forward with geothermal heat pumps.The HVAC contractor for the project was K&M Shil-lingford, Inc. The first action it took was to calcu-late what the load would be for each apartment type to have the appropriate size well for each individual apartment, giving the apartments with greater loads vertical loop bores that were 25’ longer than those with smaller loads. They also improved insulation ef-ficiency by caulking and weather stripping doors and gaps, removing 15% of the glass, installing double-paned windows, and installing R-30 insulation in the top floor apartments. These improvements cost $244,000 but saved $398,200 by cutting system re-quirements by 180 tons, which amounts to $437 per unit or $154,200 total. The average utility bill for Park

Chase apartments was $33 by year 2000.3

For help in funding, HUD received $133,650 in utility assistance from PSO and Enerwise. PSO also contrib-uted the trenching (digging for the geothermal wells), wiring upgrades, and other necessary services that would have cost about $120,000.

OtherBenefitsEach unit has its own thermostat and meter so resi-dents can control their apartment’s temperature.5• The equipment and maintenance are entirely in-

side or underground, reducing the possibility of damage to the system.

• Occupancy of the Park Chase public housing is full now, compared to the half-full occupancy be-fore the geothermal installation.

• The boiler room was converted into a community learning center.

ImplicationsThe Park Chase case study is relevant to the Huron Highlands geothermal proposal because both commu-nities focus on keeping rent and utilities affordable, and the major concerns are over high initial costs. The Park Chase study shows that it is beneficial to lessen the load of heating and cooling in the units as much as possible before installing geothermal heat pumps. This is a good first step for Huron Highlands or any community wishing to have more energy-efficient homes. Many energy providers offer efficiency as-sessments and discounts for neighborhoods wishing to have them. Also, Park Chase’s individual wells con-necting to a vertical ground loop made it possible for each unit to have a customized system for maximum

37APPENDIX C: FULL CASE STUDIES

APPENDIX C: FULL CASE STUDIES

Page 38: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

ENO COMMONS, NORTH CAROLINA

IntroductionEno Commons is a cohousing community con-sisting of 22 energy-efficient houses, located in Durham, North Carolina. One of the most effec-tive strategies Eno Commons adopted to achieve energy-efficiency is the implementation of a geothermal heating/cooling system. As both Eno Commons and Huron Highlands are residential communities, it provides some basis for com-parison. The lessons learned from Eno Commons could be applicable to Huron Highlands for fur-ther analysis. This memo will first provide a short description of Eno Commons’ s background, fol-lowed by elaborating several reasons for its choice of implementing a geothermal system. This memo concludes by highlighting the implications to the Huron Highlands Neighborhood in terms of noise generated by the system, installation method, and resident apathy.

BackgroundThe construction of Eno Commons originated from developer Sherri Zann Rosenthal’s version of American Dream, which is to promote a com-munity where people and the environment could live harmoniously. Rosenthal gathered 22 families with compatible energy saving views to engage in designing both the community and their homes, and her goal was to cut average total energy of each house by half.1 The neighborhood has in-corporated many energy-efficient items including the use of low-E glass windows, the adoption of passive solar heating strategies, thermal mass heat storage and geothermal heat pumps (GHP).

Why GeothermalGeothermal as an alternative form of renewable energy no longer takes a backseat in the discussion of accomplishing green and clean cities. Geother-mal systems work by using the earth as an energy source to heat up the air through the GHP. The geothermal systems’ strengths impressed Rosen-thal and she decided that it was the most suitable heating/cooling system for Eno Commons.

Costs and SavingsBy using the earth’s renewable energy source in the ground, the geothermal system is expected to save residents up to 60 percent of their elec-tric heating bills and 40 percent on their cooling as compared to older heating systems and conven-tional air conditioners.2 After the installation of a geothermal system, the average electricity bill in each home averages at $35 per month, encom-passing both heating and cooling.3 The total sav-ing for each household on utility bills is projected at $1,100 a year.4 Besides this, geothermal systems have a very low life cycle costs, including initial, operating, and lifetime maintenance costs. Eno Commons was able to get a low installation price from Evangelist Service Company due to econo-mies of scale because the system was installed for the entire neighborhood.5

Clean EnergyAccording to a 1993 Environmental Protection Agency (EPA) report, GHP has the lowest carbon dioxide emissions and the lowest environmental cost among all technologies analyzed.6 In addition, GHP consumes about 30 percent less refrigerant than ordinary air conditioning units.7 Because of the factory-sealed refrigerant system in GHP, it re-

efficiency. Since the Huron Highland residents have a variety of home sizes and have demonstrated a de-sire to preserve the natural land south of their houses, individual vertical wells may be a good choice for them, too, since it would not take as much horizontal land and removal of trees. I hope this has been help-ful in your decision making, and please contact me if you have any further questions.

SOURCES“GHP Retrofit Provides Energy Efficiency for HUD.” International Ground Source Heat Pump Association (1996). Web. 11 Mar. 2011.Park Chase Apartments: A HUD Project, Oklahoma. Publication. Geothermal Heat Pump Consortium, Inc., 16 July 2008. Web. 11 Mar. 2011.Stuebi, Richard T. “Geothermal Heat Pump: Green for Your Wallet, Green for Our Planet.” Next Wave Energy. 29 Nov. 2000. Web. 11 Mar. 2011. <http://www.nextwave-energy.com/pdf/GHPs.pdf>.

38 APPENDIX C: FULL CASE STUDIES

Page 39: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

duces the risk of leakage and minimizes ozone layer destruction. Geother-mal system is a wise choice for neighborhoods like Eno Commons that aim to drive towards clean energy and sustainability.

FlexibilityGeothermal systems can come in many forms, catering to differing needs. In Eno Commons, the first two homes used horizontal borings, that is to bore the trench in a horizontal direction and it takes up a large area of land. However, the developer learned that the continual adoption of horizontal boring for the remaining homes would be impossible as the trench length needed for horizontal boring would cause damage to rocks and trees that the community wanted to preserve. Therefore, they switched to a vertical bore for the remaining 20 homes because vertical loops sink tubing deep into the ground and requires little land.8 One additional advantage of geo-thermal system is that it is a completely silent system, which is great for Eno Commons residents who value tranquility. Residents were impressed by the system and commented that the heat pump in each house generates no more noise than a refrigerator.

Conclusion- Implications for Huron HighlandsWith the global drive toward sustainability, the city of Ann Arbor has been working to improve energy efficiency and promote renewable energy. The most used renewable energy currently in Ann Arbor is biofuel and renew-able electricity. Geothermal energy, as an alternative energy attracts the city’s attention and Huron Highlands will serve as a pioneer of geothermal system for other neighborhoods in the city.

Installation MethodsNext, Eno Commons shows that the installation method could vary accord-ing to the topographical conditions, thus this flexible installation method gives Huron Highlands the option to choose which best fits its physical conditions. Vertical loop method might be applicable to Huron Highlands due to the land constraint in the neighborhood community. Vertical loop drills the geothermal well to about 100 to 200 foot into the ground and hence, it solves the problem of land scarcity in the community.

Resident ApathyIn addition, Eno Commons and Huron Highlands contrast in residential

characteristics. From the survey distributed to the in Huron Highlands res-idents, the results have shown some degree of resident apathy towards the installation of geothermal system. However that is not the case for Eno Commons, which comprises of residents who have similar mindsets about clean energy and sustainability. Therefore, this issue is not addressed in Eno Commons’ s case. Often, resident apathy results from their lack of awareness on the amount of savings and benefit that geothermal system could generate. Hence, it is vital for Huron Highland residents to see the tangible benefits and savings that geothermal system could bring them.In conclusion, the success story of Eno Commons shows that Huron Highlands could be a potential lead in implementing a community-wide geothermal system in Ann Arbor.

SOURCES1. Meryl Davids Landau Common Grounds - creation of the Eno Com-

mons environmentally oriented community in North Carolina - Brief Article. Sierra. FindArticles.com. 12 Mar, 2011. http://findarticles.com/p/articles/mi_m1525/is_1_85/ai_62828632/

2. Sally Keeney. On top of buried treasure.2001.Retrieved March 10, 2011 from http://enocommons.org/geothermal_herald.html

3. North Carolina Green Building Technology Database. http://www.nc-greenbuilding.org/site/ncg/public/show_project.cfm?project_id=174

4. Meryl Davids Landau “Common Grounds - creation of the Eno Com-mons environmentally oriented community in North Carolina - Brief Article”. Sierra. FindArticles.com. 12 Mar, 2011. http://findarticles.com/p/articles/mi_m1525/is_1_85/ai_62828632/

5. Sally Keeney. On top of buried treasure.2001.Retrieved March 10, 2011 from http://enocommons.org/geothermal_herald.html

6. Office of Geothermal Technologies, Environmental and Energy Ben-efits of Geothermal Heat Pumps.

7. Sally Keeney. On top of buried treasure.2001.Retrieved March 10, 2011 from http://enocommons.org/geothermal_herald.html

8. North Carolina Green Building Technology Database. http://www.nc-greenbuilding.org/site/ncg/public/show_project.cfm?project_id=174

39APPENDIX C: FULL CASE STUDIES

Page 40: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

40 APPENDIX C: FULL CASE STUDIES

KLAMATH FALLS, OREGON

Summary Klamath Falls’ implementation of the geother-mal energy is an excellent case study for the City of Ann Arbor in regards to the legal and techni-cal issues the city can expect when introducing a new energy utility system. Klamath Falls, like the city of Ann Arbor, decided to research alter-native heating and cooling systems to provide a cleaner, more efficient energy source to the busi-nesses and residents, however, due to poor planning and research, con-struction was delayed by three years. This memo summarizes the hurdles Klamath Falls dealt with regarding citizen involvement, legal opposition, and marketing strategies. It then provides a sug-gested five-point process for procedural implica-tion and a six-point marketing strategy the City of Ann Arbor could utilize to avoid or alleviate these hurdles in a timely and effective manner.

Background Klamath Falls, Oregon decided to implement a large scale geothermal system in 1980. Towns-people were concerned about the environmental implications and asked the city to research the effect the system would have on the local aqui-fer. Additionally, the townspeople wanted the city to follow certain criteria they listed before the city would move forward with construc-tion. By this time, the city had already drilled production wells and contracted bids, so they

decided to move forward without implementing the necessary procedural rules the townspeople requested. The townspeople responded by for-mally organizing into the citizen group “Citi-zens for Responsible Geothermal Development (CRGD)”and voted to create an ordinance which regulated the pumping of geothermal fluids and required the fluids to return to the same well from which they came. The State of Oregon then filed suit, claiming the ordinance regulating geothermal fluids gave the city power held by the state. The court ruled in favor of the city as did the state appellate court1 and construction of the geothermal system final-ly began in 1984, three years behind schedule. The city’s geothermal utility initially connected to government buildings in the downtown area and eventually expanded to commercial build-ings and allowed for residential geothermal systems to connect to the city system.

Procedural Strategies Construction and implementation of the Klamath Falls Geothermal utility was delayed over three years due to the city’s poor procedural practices. Lienau describes these five recommendations2 for dealing with the public from his extensive study of the situation: . Create a Public Awareness Program – Consider including a public survey regarding geothermal technologies, originate support from as many citizens and local authorities as possible, and

create an advisory board in charge of educating the public and directly communicating with and providing answers to the public. . Create Test Programs – Conduct research and provide a database of all information pertaining to the geothermal capacity of the expected land to be used. . Prepare Mitigation Measures – Hire outside legal assistance to form a permanent program to deal with property, land use, insurance, and other legal issues. . Identify Statuary Authority – Early on in the process, create a legal implementation process and make research and incentives information available to the public. Additionally, prepare for potential future users of the system by having a streamlined process and incentives in place. . Prepare a Market Analysis – Provide a list of potential users, system capacity, maximum ca-pacity, weather patterns, and different average heating and cooling usages throughout the day in the analysis.

Marketing Strategies By 1991, the Klamath Falls geothermal utility was in full operation. However, the only clients were the same original 14 government buildings which did not provide the revenue required to maintain the system. In response, the city devel-oped a marketing strategy to attract new custom-ers and the following six items were deemed the major issues for focus.3 . Rates – The city determined that switching to

Page 41: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

41APPENDIX C: FULL CASE STUDIES

the geothermal utility provided a 52% reduc-tion in heating costs for its clients. However, this was hard to prove due to incorrect effi-ciency assumptions from the building owners. To deal with this, the city changed from a me-tered system to a flat rate system, which usu-ally amounted to a reduction of 50% in heating costs for the users and eliminated the need for users to install a meter.4

Customer Retrofit Cost – Klamath Falls deter-mined that smaller buildings could connect to the system directly and bypass the need for a heat exchange system. This reduced retrofitting costs substantially; however, the geothermal system type that Ann Arbor implements will determine this strategy. . Financing – Research into state and federal grants is necessary to help subsidize the cost of the system for potential customers. Klamath Falls helped guide the new customers through the application process. . System Reliability – Klamath Falls had issues with its system that raised distrust amongst the city residents. They fixed the issues and pro-vided reports on improvements with the users. Ann Arbor should provide be open and com-municative with the system to all potential cus-tomers. . City Credibility – Klamath Falls experienced some poor publicity from rate hikes with other utilities which created distrust amongst its resi-dents. Long term contracts to lock in rates re-

solved this issue. . Manpower Requirements – Klamath Falls lacked a staff dedicated to the geothermal util-ity. They found it necessary to create a profes-sional staff to provide retrofitting estimates, technical information, and promote the system.

System Details The geothermal system initially connected to fourteen county or public buildings including the County Museum, Fire Station, Post Office, City Hall, City Hall Annex, County Library, County Courthouse, Old County Jail, County Offices, County Annex and 120 residences.5 The original system was designed for a thermal capacity of 20 MBtu/hr and only preformed at roughly 20% capacity. The city began an ex-tensive marketing campaign to connect more customers to the system and the system gained a substantial amount of customers since. In 1994, the system grew to include heating of sidewalks and roads by utilizing buried tubes of antifreeze keeping them snow and ice free in mild winter conditions. By 2004, the city up-graded the system to maintain a thermal capac-ity of 36 MBtu/hr allowing the benefit to more customers.6

Summary

The City of Ann Arbor should incorporate the lessons learned from the city of Klamath Falls and make sure to provide adequate preparation regarding community involvement, potential legal issues, and marketing strategies. Guide-lines the city should follow are the five prepa-

ration points determined by Lienau for poten-tial community and legal hurdles. Additionally, the city should use the six point marketing strategy implemented by Klamath Falls as an outline for its own marketing strat-egy. Implementing these strategies should con-tribute to Ann Arbor creating a successful geo-thermal utility as respected as Klamath Falls’.

SOURCEShttp://ci.klamath-falls.or.us Cost Suppressing Oregon’s Geothermal Power, The Columbian, Vancouver, WA. February 20, 2002. STATE OF OREGON v. CITY OF KLAM-ATH FALLS, OREGON, CA No. A26792 68 Ore. App. 148; 682 P.2d

779; 1984 Ore. App. LEXIS 3133 Brown, Brian. Klamath Falls Geothermal Dis-trict Heating Systems. GHC Bulletin, March 1999. Lienau, Paul. Geothermal District Heating In-stitutional Factors the Klamath Falls Experi-ence. Geo-Heat

Center, Klamath Falls, OR. 1984. Rafferty, Kevin. “Marketing the Klamath Falls Geothermal District Heating System.” Geo-Heat Center, Klamath Falls, OR. 1993.

Page 42: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

42 APPENDIX C: FULL CASE STUDIES

PRINGLE CREEK COMMUNITY, SALEM, OREGON

Pringle Creek Community introduced a community geother-mal system and has received various awards for sustainability. Pringle Creek’s site is the former Fairview Training Center, a state-run facility for children with developmental disabilities. Sustainable Development Inc.(SDI), a local developer, bought 32 acre of the site from the state in 2004. In order to realize sus-tainable energy use in the community, the Pringle Creek Com-munity turned a well built for domestic water use and irrigation into a source for a GHPS water distribution system.1 The com-munity laid the GHPS district loop by using “a supply piping system within the street right of way”2 to distribute 59-degree water throughout the year to 70 residential lots and Village Cen-ter. Each house can extract and release the heat through an in-dividual heat pump. People can also use water in a GHPS for irrigation. The Opsis’ case study claims that “the [GHPS] system is approximately 300% more efficient at delivering heat than a gas furnace.”3

The GHPS (Geothermal Heat Pump System) district loop Pringle Creek’s GHPS district loop is highly evaluated in the market. Natural Home magazine mentions that this district loop is one of reasons to be selected as America’s Top 10 Best Green-Build Neighborhoods in 2010.4 The community adopted an open loop system with vertical boreholes, using water as medium of the heat. Even though the community laid out the district loop, residents can choose between the GHPS and a conventional gas furnace. If Huron Highlands chooses the district loop, it needs to make sure the following: a. What type of GHPS system is most appropriate in Huron Highlands: an open loop system or a closed loop system, a vertical borehole or horizontal loop system, and water or antifreeze material as medium of heat transmission.b. What is the most efficient way to distribute heat in the community: the use of street right-of-ways and the supplemental

usage of PV solar panels.c. Possibility to apply the heat of GHPS to other eco-friendly methods in Huron Highlands: Some residents show their interest in community garden; we need to research the possibility of application of the GHPS district loop to a possible community garden in Huron Highlands. SOURCES

1. Opsis architecuter. a case study in sustainable design pringle creek community& pringle creek cottage. p.9

2. Ibid.p.93. Ibid.p.94. Natural Home Website. “America’s Top 10 Green-Built

Neighborhoods” <http://www.naturalhomemagazine.com/energy-efficiency/americas-top-ten-best-green-built-neighborhoods.aspx?page=2>

The GHPS District Loop

Page 43: NEIGHBORHOOD GEOTHERMAL FOR THE CITY OF …...The City of Ann Arbor has approximately 114,000 residents and is the largest city in Washtenaw County. 1 Annually, Ann Arbor experiences

43APPENDIX C: FULL CASE STUDIES

Community Greenhouse in the Pringle Creek

Geo-thermal Potential in the Pringle Creek

Community Garden in the Pringle Creek